Exodus of big box retailers signals change in Hawaii’s retail landscape


It’s out with the old and in with the new as big box retailers around the state are closing shop. Soon, there will be just one Kmart store on Oahu, and last summer, all Sports Authority locations shut down.

These are huge spaces left vacant, but don’t count on another major retailer coming in to take over.

We reached out to real estate analysts and learned that landlords benefit more from carving up the spaces left empty. We also asked if that means other big box stores won’t be coming to Hawaii to open shop.

According to real estate analyst Stephany Sofos, for retailers and developers, space in Hawaii is key — where to find it, what’s the right location and how do demographics factor in are important points.

When asked if other popular mainland retailers like IKEA, REI and Trader Joe’s won’t be coming here because of these closings, Sofos replied “no, not at all. It gives us more of an opportunity to have them here.”

We spoke with Todd Apo of Howard Hughes Corporation to find out what will happen with the former Sports Authority space on Ward Avenue. First, there will be the Honolulu Art Festival, which will take place there from March through May. After that, a short-term tenant will occupy the space, and then redevelopment of the area.

“That whole space there, under our master plan, will be additional residential mixed-use retail,” Apo said. “We’ll probably bring in some new dining. It’s a great location.”

Besides housing, Apo says that bottom space could be divided into smaller lots, like what is happening at the former Kmart location in Iwilei.

“From a landlord’s perspective, if you can break it into smaller spaces, you can often times lease it at rents a little bit higher, significantly higher, than what an anchor tenant might take,” he said. “It’s a financial drive.”

We checked with Mike Hamasu of Colliers International, who researches and analyzes market conditions for commercial real estate, about the trends in Hawaii.

“We don’t have a lot of retail competition that occurs here,” he said. “If you look on the mainland, there’s maybe 5 or 6 sporting goods stores, there are 10 or a dozen different types of grocery stores. Well here, we are very limited, so that impact of increased national competition here should drive continued increased sales.”

And just because a space is closing doesn’t mean other retailers won’t want to step in and take over.

Who’s going to win here ultimately? “Restaurateurs and retailers, they have to reinvent themselves every 7-9 years,” Sofos said, “and if you have a good concept, if you have a good price point, the world is your oyster.”

We also checked to see what will happen with the former Sports Authority in Waikele and the Kmart in Halawa once it closes, and we’ll let you know when we find out.

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